- Matthew Gould became an early bitcoin bull in 2013 and has since launched leading crypto firm, Unstoppable Domains.
- Gould breaks down why the stablecoin market will grow to $1 trillion by 2025 despite regulatory concerns.
- He also shares his outlook for how the crypto markets will trade for the rest of this year.
Decentralized finance is all about removing barriers by cutting out intermediaries and allowing direct transactions between two parties, often using cryptocurrencies that run on blockchain technology.
Cryptocurrencies are everywhere now, but they’re not quite as straightforward to use as some of their advocates would suggest. When most users send or receive digital tokens, they’re often faced with the daunting task of handling a long hexadecimal crypto-wallet address that is all but indecipherable.
“Imagine you were selling a product, and then the first thing that people felt when they used your product was fear and that’s essentially what it was like for cryptocurrency,” Matthew Gould, CEO and founder of Unstoppable Domains, told Insider.
That’s why Gould, a bitcoin bull since 2013, launched Unstoppable Domains in 2018, so he could improve the user experience in managing crypto wallet addresses. Individuals are able to buy and own their own crypto domain, which is easy to read and handle.
This user-friendly concept caught the attention of big-name venture capitalists, such as Draper Associates and Boost VC.
Gould took another step forward improving crypto user experience this week through a partnership with Circle, which issues the USDC stablecoin. At $25 billion, USDC is the second-largest stablecoin by market value, behind Tether, which has a market capitalization of $62 billion, according to Coinmarketcap.com.
Stablecoins are cryptocurrencies pegged to a fiat currency on a 1:1 basis and are, in theory, backed by reserves, such as short-term government bonds and the currency itself.
The addition of simple domain names helps Circle work toward wider adoption of stablecoins as another barrier is removed from the fear and risk of accessing crypto.
The stablecoin market has flourished in the last couple of years, increasing in value to around $100 billion now, from less than $1 billion in 2019.
Looking at the rate of growth, Gould expects the private stablecoin market to reach $1 trillion by 2025, which would be 10 times growth year-over-year, for the next four years.
“We may even do it quicker than that,” he said.
Part of the driver of this will be the continued recovery of decentralized finance applications.
“The more people with stablecoins in the pocket, the more people who can participate in decentralized finance,” Gould said.
On the flip side, the rapid growth of stablecoins has brought financial risk. Top stablecoin Tether has yet to produce an independent audit, for example. But Gould said this goes with the territory.
“Whenever you have that kind of growth, you’re gonna have risk,” he said.
But with increased competition in the marketplace, together with greater regulatory clarity, that risk will subside, as products become safer for consumers, he said.
“Groups like Circle with their USDC have taken the most conservative and safest approach in building out their stable coins,” Gould said. “And they’ve been really actively engaged in the US to ensure that they’re compliant.”
Gould is most concerned by the development of algorithmic stablecoins, such as IRON Finance’s stablecoin that went to zero. These tokens have a completely different risk profile and shouldn’t be able to advertise in this way, he added.
“You shouldn’t be able to call yourself a $1 coin, if you don’t actually have $1 in the bank,” Gould said. “That’s one opinion, we’ll see what others think. I am glad that people are paying attention, I think it’s important that people do.”
Regulators shouldn’t be too heavy-handed, however, as too many rules could stifle the fast innovation, which has so far been positive for consumers, Gould said. This part of the reason he thinks there will still be rapid growth in privately issued stablecoins, despite increasing government focus on central bank digital currencies (CBDCs), given the slower pace at which public institutions move.
Crypto market outlook
The volatility of stablecoins and crypto assets have caught the attention of the world’s regulators as leading crypto assets bitcoin and ether become more mainstream.
The new chairman of the SEC, Gary Gensler, spoke out this week about regulating the cryptocurrency markets, which he described as the “Wild West”.
Bitcoin (BTC) has dropped more than 50% from highs of around $64,000 in mid-April to lows of $29,000 in July. It now trades around $38,000.
Gould doesn’t expect a return to the highs witnessed in April, at least not this year.
“I think we’re going to continue to be range-bound for the rest of this year,” Gould said.
“I expect the crypto market more generally to continue consolidating. This is based on past experience, typically when the market crashes 50% or more, it takes a year or two of consolidation,” he said.
Indeed, when bitcoin tumbled 50% from a then-record $19,891 in December 2017 to around $9,880 in February 2018, it took another two years before it experienced another leg higher. After peaking around $14,000 in April 2019, it gradually fell by around 50% to lows below $4,000 in March 2020, which marked the depths of the coronavirus market crisis.